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Accountancy – XII_2021-09

March 26, 2020
Appropriation of profit among the partners:
Partners can be appropriated profits in the form of Interest on Capital, Salary to partner or
Commission to partner.
Interest on capital is generally provided for in two situations:
(i) when the partners contribute unequal amounts of capitals but share profits equally, and
(ii) where the capital contribution is same but profit sharing is unequal.

Questions:

1. No interest is allowed on partners’ capitals unless it is expressly agreed among the
partners. (True / False)

2. When the ratio of capital contributed by the partners is same as profit sharing ratio,
there is no need to allow interest on capital to the partner. (True / False)

3. In the absence of agreement, partners are not entitled to: (Choose the correct
answer)
(A) Salary
(B) Commission
(C) Equal share of profit
(D) Both (A) and (B)

4. In the absence of Partnership Deed, the interest is allowed on partner’s capital:
(Choose the correct answer)
(A) @ 5% p.a.
(B) @ 6% p.a.
(C) @ 12% p.a.
(D) No interest is allowed

5. Profit and Loss A/c showed net profit of `1,40,000. Total interest on capital amounted
to `8,000 and one partner was entitled to a commission of `5,000. Total interest on
drawings charged from the partners amounted to `1,200. The divisible profit will be:
(Choose the correct answer)
(A) `1,28,200
(B) `1,44,200
(C) `1,25,800
(D) `1,41,800

6. A, B and C are partners in a firm without any partnership deed. A’s capital is 1
`3,00,000 and B’s capital is `1,00,000. C is a working partner and has not invested
any capital. C is claiming annual salary of `30,000 to which B is not agreeing. Firm
made a profit of `1,50,000. How the divisible profit will be distributed among the

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